setting sales objectives
- 1. SALES FORCE MANAGEMENT Setting Sales Objective30 March 2015 BY: YAZAD UMRIGAR
- 2. Hierarchy of Objective Setting 30 March 2015Yazad Umrigar Sales Force Management 2 Personal Selling Strategy Role of Personal Selling in Total Promotional Programme Qualitative Objectives for Personal Selling Quantitative Objectives for Personal Selling The qualitative personal- selling objectives are long term and are carried over from one year to other. The sales volume objective is the key quantitative objective. All other quantitative objective derives from or is related to the sales volume objectives.
- 3. Some Qualitative Sales Objectives 30 March 2015Yazad Umrigar Sales Force Management 3 To maintain contacts with present customers To search out and obtain new customers To keep customers informed on changes in product line and other aspects of marketing strategy To provide technical advice and assistance to customers To assist in training customers employees related to product To collect and report market information of interest and use to company management
- 4. Some Quantitative Sales Objectives 30 March 2015Yazad Umrigar Sales Force Management 4 The sales volume objective i.e. the dollar or unit sales volume is the key quantitative objective. This objective govern other quantitative objectives like Market share expansion Profitability of orders Product diversification Control personnel selling expenses To capture wallet share
- 5. Market Potential, Sales Potential & Sales Forecast 30 March 2015Yazad Umrigar Sales Force Management 5 A market potential is an estimate of the maximum possible sales opportunities present in a particular market segment and open to all players during a stated future period A sales potential is an estimate of the maximum possible sales opportunities present in a particular market segment open to a specified company during a period. A sales forecast is an estimate of sales, in dollars or physical units, in a future period under assumed set of internal and external factors MP SP SF
- 6. Example – Maruti Alto 30 March 2015Yazad Umrigar Sales Force Management 6 MP – All potential buyers of small petrol cars SP – All potential buyers of Alto SF – Expected Sales of Alto Market Share = SF/MP
- 7. Market Definitions 30 March 2015Yazad Umrigar Sales Force Management 7
- 8. Market for Maruti Small Cars 30 March 2015Yazad Umrigar Sales Force Management 8 All passenge r cars SUVs, big cars Small Cars Electric Small Cars Petrol Small Cars
- 9. Finding Market Potential 30 March 2015Yazad Umrigar Sales Force Management 9 Market Identification • Who buys the product? • Who can buy the product? Market Motivation • Why do people buy? • Why people don’t buy? Market Factors • What affect product demand • Relevant Market Indexes For Maruti Alto’s market potential, market factors could be person reaching certain age in a year, fuel prices and interest rates. Market indexes could be GDP growth, per capita income etc.
- 10. Why Sales Potential is not Forecast 30 March 2015Yazad Umrigar Sales Force Management 10 Sales potential is how much company can sell if it has all the necessary resources and desired to use them. Sales forecast is lesser than sales potential because: Production capacity limitations Distribution network constraints Limited Financial Resources Whole market is not profitable
- 11. Sales Forecasting Methods 30 March 2015Yazad Umrigar Sales Force Management 11 Jury of Executive Opinion Poll of Sales Opinion Projection of Past Sales Time series analysis – Mathematical model based on cyclical trends, seasonal changes and fluctuations Survey of Customer’s buying Plans Regression Analysis Econometric Model Building
- 12. Industry Forecast and Company Sales Forecast 30 March 2015Yazad Umrigar Sales Force Management 12 The link between industry market forecast and company forecast is Market Share Market Share determination is as tricky as determining sales forecast Information on competitors' plans to launch new models, advertising and selling strategies is needed Forecasting a company’s market share varies in complexity from one industry to other
- 13. Deciding Sales Volume Objective 30 March 2015Yazad Umrigar Sales Force Management 13 A sales forecast do not automatically become company's sales volume objective but acts as an starting point The sales volume objective should be consistent with management's profit aspirations and company’s marketing capabilities. Provision for eventuality, local factors and capability plays an important role in determining sales objective.
- 14. Steam Turbine Example 30 March 2015Yazad Umrigar Sales Force Management 14 Projections from 12th and 13th Five Year Plan. Gestation Period. Historical Achievements in Previous Plans Share of various technologies, fuel types and efficiency level. Various segments Company’s own expansion plans, new product launches, competitor’s product launches. Potential customers’ capex plans Sales objective of a given year.
- 15. 30 March 2015Yazad Umrigar Sales Force Management 15 .....cntd....Steam Turbine Example Power capacity installation in Year 2015 50 GW Coal Based power capacity installation in Year 2015 30 GW Retirements coal based power generation in year 2015 5 GW Total coal based installation in year 2015 35 GW Gestation Period 2 years Market of coal based power generation in 2013 35 GW Market of coal based power generation of capacity upto 250 MW 10 GW Price/GW Rs 1000,000 Total Market Potential in 2013 Rs 10,000,000 Expected Market Sahre in 2013 50% Sales Potential in 2013 Rs 5,000,000 Sales Forecast in 2013 Rs 3,000,000 Sales Objective in 2013 Rs 2,500,000
Editor's Notes
- #3: The allocation of sales volume objective should be such that all products get enough focus
- #4: Customer Days Engagement at earlier stage CRM Customer awareness Input to Strategy
- #5: Some objective are contradictory to each other. So top management direction is needed One quantitative objective lead to other Pareto analysis
- #6: Market potintial is first input before making any capex decision To determine sales potential both internal evaluation and competitor evaluation is reqired Sales Forecast is limited by firm’s manufactirn capability, cost of capital etc
- #7: Market potential should also include those market segmetns in which the firms cannot sell profitalbley
- #10: Also consider substitutes Not only current market but future market to be tracked considering opportunities and threats
- #11: Wrong investments should be avoided based on ambitious sales forecasts